A Single Minnesota Building Was Linked to $380 Million in Medicaid Billing — How Was This Allowed to Happen?

In a startling development, a Minnesota building that was originally a linen factory is allegedly now housing around 400 Medicaid billing businesses. In a social media clip, Mehmet Oz, administrator of the Centers for Medicare and Medicaid Services (CMS), revealed that these businesses billed approximately $380 million (£278 million) to Medicaid.

'Behind me is the Griggs Midway building. It looks like a factory because it was a factory. Roughly 400 Medicaid businesses were started in the building behind me over the last several years,' Oz said while standing alongside acting CDC Director Jim O'Neill outside the building in St. Paul.

Oz expressed serious concerns about the scale of potential fraud, given the building's location within an industrial area. 'You can't imagine getting extra business support. An autistic child probably wouldn't want to come here. You hear the noise. It's just not a hospitable place. The question is, how is it possible 400 businesses, billing almost $400 million, were able to thrive here?' he asked in his social media post.

Minnesota Governor Faces Difficult Questions

Oz was taken aback that state authorities seemingly overlooked the fact that an industrial complex could host and operate such a large number of Medicaid-billing entities.

'How is it possible this could come up like an abscess in the heart of Minneapolis and nobody was watching? I think it's because they weren't looking. They didn't want to know that there was a problem happening here. It's very concerning to me that only now, when there's more federal supervision, are people beginning to ask tough questions,' Oz added.

The state of Minnesota has recently attracted scrutiny for several cases of fraud. One notable example is a $300 million (£219.5 million) pandemic-related fraud case involving the nonprofit Feeding Our Future. Prosecutors allege that it was the largest COVID-19 fraud case in the United States, with defendants misusing a federally funded programme designed to provide food for children.

Last week, the chair of the House Energy and Commerce Committee and two subcommittee chairs requested Minnesota Governor Tim Walz and the acting commissioner of the Department of Human Services, Shireen Gandhi, to share documents and communications related to alleged Medicaid fraud in the state.

Meanwhile, Oz expressed concerns during an interview about a long-standing 'cover-up'. Walz acknowledged that Minnesota is grappling with a fraud problem, and that authorities are making progress in tackling it.

CMS Audits State Medicaid Programmes

House Committee on Energy and Commerce Chair Brett Guthrie, alongside Representatives John Joyce and Morgan Griffith, issued a joint statement: 'The extensive fraud schemes being perpetrated in Minnesota have wreaked havoc on government-funded health programs. We have an obligation to ensure finite taxpayer dollars are being used responsibly, and that the most vulnerable Americans are not being exploited to the benefit of fraudsters and foreign actors.'

They further indicated that the fraud could have been ongoing since 2013, revealing multiple criminal schemes, including overbilling, false records, identity theft, and phantom claims within Medicaid social service programmes.

According to a recent press release, CMS is currently auditing the Minnesota Medicaid programme, freezing provider enrolment, and deferring payments for 14 programmes, which collectively cost taxpayers approximately $3.7 billion (£2.7 billion) annually. The officials also noted that the Trump Administration had taken significant steps to address the fraud issues in Minnesota.